T-Mobile, MetroPCS to merge

Barbara Ortutay and Juergen Baetz / The Associated Press /

Published Oct 4, 2012 at 05:00AM

NEW YORK — T-Mobile and MetroPCS have agreed to combine their struggling cellphone businesses in a deal aimed at letting them compete better with their three larger rivals.

The combined company will use the T-Mobile brand and have about 42.5 million subscribers. Although T-Mobile will stay No. 4 among U.S. wireless companies, it will get access to more space on the airwaves, a critical factor as cellphone carriers try to expand their capacity for wireless broadband.

That could ultimately mean more choices and better services for customers, though Forrester Research analyst Charles Golvin doesn’t believe the deal will make a “revolutionary difference” for U.S. cellphone customers. That said, MetroPCS customers will probably have to buy new phones at some point over the next three years as they are moved over to T-Mobile’s network.

Both companies have faltered in the highly competitive U.S. cellphone market led by Verizon Wireless and AT&T Inc. T-Mobile has 33.2 million subscribers, well behind No. 3 Sprint Nextel Corp’s 56 million. MetroPCS is even further back, ranking fifth with 9.3 million.

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